Key takeaways
- Yes. On the US side what follows you is mainly tax and reporting: Treasury's outbound investment rules cover the People's Republic of China, with Hong Kong and Macau, and the December 2025 law that widens them adds Cuba, Iran, North Korea, Russia and Venezuela, not South Africa (US Treasury; Public Law 119-60).
- The South Africa-US income tax treaty, in force since 28 December 1997, caps South African dividends tax at 5% for a US company holding directly at least 10% of the voting stock and 15% for other US owners, against 20% without it, and makes most interest and royalties taxable only in the US (Articles 10 to 12).
- The US still taxes its citizens and residents as if the treaty did not exist, and credits South African tax, subject to US law (Articles 1(4) and 23). Owning the company brings US filings: the FBAR once foreign accounts you own or sign on pass $10,000, Form 8938, and Form 5471 from a 10% stake.
- On a US passport you can visit South Africa for up to 90 days without a visa, but a visitor may not work unless Home Affairs authorises it, and the law counts running a business as work. To live there and run it, you need a visa that allows it.
- Our office hours, 08:00 to 17:00 SAST, are 02:00 to 11:00 in New York while US daylight saving time runs and 01:00 to 10:00 in winter, so most of the work happens by email and WhatsApp.
What changes when the buyer is in the United States
Three things change for an American buyer: the 1997 treaty limits South African tax, the US taxes its citizens on top of it wherever they live, and a foreign company or bank account brings US information returns. Buying as an individual, a US corporation or an LLC changes all three, so settle that first with tax advisers in both countries. The steps every foreign buyer takes are in our general guide; what follows was checked on 9 October 2026 and is general information.
The South Africa-US income tax treaty
The treaty was signed on 17 February 1997 (treaty text, SARS) and has been in force since 28 December 1997, with no amending protocol (SARS status overview, 1 October 2026).
| What you receive | South African rate | Treaty limit | Article |
|---|---|---|---|
| Dividends | 20% | 5% for a company holding directly at least 10% of the voting stock; otherwise 15% | 10(2) |
| Interest | 15% | Taxable only in the US; certain contingent interest up to 15% | 11(1), 11(5) |
| Royalties | 15% | Taxable only in the US | 12(1) |
| Gain on selling shares | Non-residents: land-rich shares only | Taxable only in the US, except South African real property (see below) | 13 |
South African rates: SARS, Taxation in South Africa 2026 (30 September 2026), matching SARS's dividends and interest treaty tables. Income of a permanent establishment you have in South Africa loses the limit (Articles 11(3), 12(3), 13(3)).
Who can claim it. Under Article 22 a US-resident individual qualifies, as does a company whose shares carrying over half its votes and value trade regularly on NASDAQ, a US national securities exchange or the JSE (22(2)(c), 22(5)). A private US company qualifies if qualifying persons own at least 50% of each class of its shares on at least half the days of its year and under half its gross income goes as deductible payments to people resident in neither country (22(2)(f)). Article 22(3) needs a substantial, active US business connected with the South African income, and investing does not count, so a US company set up only to own the shares usually relies on 22(2)(f) or the competent authority (22(4)).
The saving clause. Article 1(4) lets the US tax its citizens and residents "as if the Convention had not come into effect", and Article 23(1) credits South African tax "subject to the limitations of the law of the United States".
Dividends: 5% or 15%, and what the IRS does with them
The 5% rate needs a company as beneficial owner, holding directly at least 10% of the voting stock (Article 10(2)(a)); the Treasury technical explanation adds that voting shares held through tiers of companies, and non-voting shares, do not count. A US individual is limited to 15%. Income through a fiscally transparent entity, such as many LLCs, counts as its owners' to the extent US tax law treats it as theirs (Articles 3(1)(d), 4(1)(d)).
Individuals. A South African company eligible for the treaty's benefits is a "qualified foreign corporation" (the treaty is in table 1-3 of IRS Publication 550 for 2025), so its dividends can be qualified dividends if you held the shares more than 60 days in the 121-day period around the ex-dividend date, unless it is a passive foreign investment company. South African dividends tax can generally be credited on Form 1116, within the US limits (IRS, reviewed 9 July 2026).
US corporations owning 10% or more. The dividend is generally deductible under section 245A, subject to a holding period and other conditions, and section 245A(d) then allows no credit or deduction for the South African tax on it (26 U.S.C. 245A), so the 5% is a cost. Distributions of earnings already taxed under the CFC rules below follow other rules.
Interest, royalties and selling later
Interest. Interest on your loan to the company is taxable only in the US (Article 11(1)), but the company withholds 15% unless it has your SARS WTI declaration before paying. Because the treaty leaves the interest untaxed here, a company you control (50% of its shares or votes, with connected persons) can deduct interest paid to you only up to roughly 30% of its "adjusted taxable income" plus interest it earns, carrying the rest forward (section 23M of the Income Tax Act). The treaty covers only an arm's-length amount (Article 11(4)), so take South African tax advice before you fund the purchase with a loan.
Royalties. If a US company licenses its brand, software or know-how to the business, an arm's-length royalty is taxable only in the US (Articles 12(1), 12(4)). Between related parties the bank also needs management's confirmation that transfer pricing documentation is kept as SARS prescribes and, for recurring royalties, an annual auditor's letter (SARB manual B.3(C)(iii), (viii)). South Africa can deny the deduction for royalties on intellectual property that the company or a connected South African taxpayer owned, or that was used in a business it bought as a going concern (section 23I), so take advice before you move a brand to a US company.
Selling. A gain on shares is taxable only where you are resident (Article 13(5)), except for real property in South Africa, which includes "an equivalent interest in real property situated in South Africa" (13(2)(c)). Neither the treaty nor the US technical explanation says whether that covers shares in a company whose value comes mainly from land. South African law taxes a non-resident on shares drawing 80% of their value from South African immovable property, where the holding is at least 20% (SARS capital gains tax guide, chapter 4), so take South African tax advice before you buy or sell.
US reporting when you own a South African company
- FBAR (FinCEN Form 114). Required when your foreign accounts together exceed $10,000 at any time in the year, including accounts of a company in which you own more than 50% of the vote or value and any account you can sign on, such as the company's account as a director (31 CFR 1010.350(e), (f)). It is filed online with FinCEN by 15 April, extended automatically to 15 October (IRS, reviewed 30 July 2026).
- Form 8938. Attached to your return when specified foreign financial assets, including foreign company stock, exceed $50,000 at year end or $75,000 at any time for an unmarried taxpayer living in the US ($100,000 and $150,000 on a joint return; more if you live abroad). Stock reported on Form 5471 is not listed again, but an individual still counts its value towards the threshold, and Part IV names the forms that report it (IRS, reviewed 20 September 2026).
- Form 5471. Filed by a US person whose stake in a foreign company reaches 10% of its vote or value, who controls it, or who is a US shareholder of a controlled foreign corporation. Not filing costs $10,000 per company per year, plus up to $50,000 after an IRS notice (Instructions for Form 5471, December 2025).
- Form 926. Cash paid into the company, such as for new shares, is reported if you then hold 10% or more, or have paid in over $100,000 in 12 months (Instructions for Form 926).
- BEA surveys. A business abroad in which a US person holds 10% or more of the votes is a foreign affiliate, and the Bureau of Economic Analysis's surveys are mandatory. The last benchmark (BE-10, for 2024) had to be filed whether or not BEA made contact; the annual affiliate forms start at $25 million in assets, sales or net income for a newly acquired affiliate, the quarterly survey at $500 million (BEA, page modified 1 October 2026).
Classification. A (Pty) Ltd is a corporation for US tax by default, unless it elects otherwise on Form 8832 (26 CFR 301.7701-3(b)(2), (c)(1)); a public limited company always is (26 CFR 301.7701-2(b)(8)). Settle the choice with your US adviser before you buy.
How US tax reaches the company's profits
A foreign company is a controlled foreign corporation (CFC) when US persons who each own 10% or more of its vote or value together own more than 50% on any day of its tax year (Form 5471 instructions), so a US buyer of a whole business usually owns one.
A US shareholder of a CFC may have to include a share of some of its income every year, dividend or not: subpart F income under section 951(a), and the section 951A amount on Form 8992 (global intangible low-taxed income, or GILTI, on the forms for 2025). An individual may be able to elect under section 962 to be taxed at corporate rates on those amounts, and so claim credit for South African tax the company paid. Public Law 119-21 of 4 July 2025 changed parts of these rules for later years.
South Africa taxes most companies at 27% (Taxation in South Africa 2026), which matters: income taxed abroad at an effective rate above 90% of the top US corporate rate in section 11 can be excluded, by election, from subpart F income (section 954(b)(4)) and from GILTI tested income, and foreign tax on excluded income is then not credited (Form 5471 instructions). Work through it with a US international tax adviser.
Visiting on a US passport, and moving to run it
Home Affairs' visa exemption list (issued 9 December 2025) lets US citizens visit for up to 90 days without a visa, on any US passport (DHA: countries exempt from South African visas); visitor's visas are for "tourism or business purposes" (gov.za). A visitor "may not conduct work" unless Home Affairs has authorised specific work and endorsed it on the visa (section 11(2) of the Immigration Act; regulation 11(7) of the Immigration Regulations), and the Act counts "any activity normally associated with the running of a specific business" as work (section 1). The law does not list what a business visitor may do, so ask the mission or an immigration practitioner before you travel. The new electronic travel authorisation is to be voluntary for visa-exempt travellers such as Americans (Minister of Home Affairs, 12 August 2026).
To live there and run the business you need a visa that allows it, usually the business visa (R5 million from outside South Africa: GN 560 of 2014), applied for in person (regulation 9(2)) at the mission DIRCO assigns to your state: the embassy in Washington, DC, or the consulate general in New York, Chicago or Los Angeles (DIRCO). If you become ordinarily resident here (Article 4(1)(b)), the tie-breaker in Article 4(2) decides treaty residence, but a US citizen stays taxable in the US, with credits shared out under Article 23(2).
Moving dollars into rand
- The route. Wire US dollars to the South African bank handling the deal; it records the investment so that dividends and sale proceeds can later go back out (see our exchange control guide). Our auction prices are in rand, so ask your bank before you bid how to fix the rate.
- FATCA. Under the South Africa-US agreement, in force since 28 October 2014, a South African bank opening your account treats a US citizen as US-resident for tax, takes your US taxpayer identification number (for example on Form W-9), and reports US accounts, and for some companies their US controlling persons, to SARS, which passes them to the IRS each year (Government Notice 93 of 2015, Article 2 and Annex I). Your own FBAR and Form 8938 are still due.
- Sanctions and bribery. US persons are generally prohibited from dealing with anyone on OFAC's Specially Designated Nationals list (OFAC FAQ 18), so screen the seller and the people behind it. The Foreign Corrupt Practices Act's bribery provisions have bound all US persons since 1977 (US Department of Justice), which matters wherever a licence, permit or government contract is part of the business.
Working with Dynamic from the United States
South Africa keeps SAST (UTC+2) all year (IANA). US zones run from UTC minus 5 (Eastern) to minus 8 (Pacific) (15 U.S.C. 261; 49 CFR part 71), with clocks an hour ahead from the second Sunday of March to the first Sunday of November (15 U.S.C. 260a).
| 08:00 to 17:00 SAST, Monday to Friday | Eastern | Central | Pacific |
|---|---|---|---|
| US daylight time | 02:00 to 11:00 | 01:00 to 10:00 | 23:00 (day before) to 08:00 |
| US standard time | 01:00 to 10:00 | 00:00 to 09:00 | 22:00 (day before) to 07:00 |
A timed auction closing at 12:00 SAST closes at 06:00 in New York and 03:00 in Los Angeles in summer. Email info@dynamicauctioneers.co.za or WhatsApp +27 84 702 3766 with the sector, size, region and budget you have in mind. The steps (non-disclosure agreement, proof of funds, registering to bid) are the same for every buyer: see our page for international buyers and the businesses for sale.